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Can More Accessory Dwelling Units Fix LA's Housing Shortage?
Amrita Khalid
Amrita Khalid is a tech journalist based in Los Angeles, and has written for Quartz, The Daily Dot, Engadget, Inc. Magazine and number of other publications. She got her start in Washington, D.C., covering Congress for CQ-Roll Call. You can send tips or pitches to amrita@dot.la or reach out to her on Twitter at @askhalid.
Can more accessory dwelling units help a city with a chronic housing shortage?
A wave of new ADU startups that are based in L.A. or serving the region are betting on it. ADU companies like Otto (formerly known as Homestead), which focus on converting pre-existing structures (such as a garage) into housing, serve as a one-stop shop that will help homeowners with financing, design, permitting and labor. Other companies like Azure Printed Homes, Cover, United Dwelling and Villa Homes offer factory-built ADUs that are constructed off-site — also known as “prefab” ADUs. Others still, such as Cottage (based in San Francisco) partner with local contractors and help homeowners design, build and attain permits for their own custom ADUs.
ADUs (also known as granny flats, in-law apartments or backyard homes) describe a category of small, in most cases self-contained homes that can be built beside the original property. A prospect that’s currently trending in Los Angeles, where a chronic housing shortage and sky-high rents coupled with a 2017 state law forcing cities to relax their ADU regulations.
But as novice ADU builders soon discovered, constructing a small house isn’t a small task.
“I wouldn’t say [..building an ADU] is exactly easy, almost anywhere,” said Celeste Goyer, the policy director of Casita Coalition, an L.A.-based organization focused on expanding the use of ADUs for affordable housing throughout the state. “You can’t just go home and pick up a hammer, and have your cousin help you build your ADU. And so expectation management for everyone involved is important.”
The process of getting approved for an ADU normally takes months.
“Generally, many people struggle with the length and complexity of the permitting process and feel like their jurisdictions impose unnecessary red tape in the permitting process,” said Alex Czarnecki, founder and CEO of the custom ADU firm Cottage.
But a number of additional laws may make ADU construction easier in California. Last year Governor Gavin Newsom signed SB 9 into law, which allows California homeowners to build a second house on a single-family zoned lot. Another law known as AB 221 requires local authorities to act on ADU permit applications within 60 days otherwise it’s automatically approved.
“It’s common for certain municipalities to take longer than that to respond to an application or provide incomplete sets of comments,” said Czarnecki. “This drags out timelines for permitting and ultimately impacts the pace at which we can add housing.”
Despite the new laws, few homeowners, Czarnecki said, should attempt to build an ADU by themselves.
“The fact remains that the average homeowner is not a land developer and is not trained or prepared to oversee and manage the design and construction of a new unit on their lot,” added Czarnecki.
To that end, the heads of some ADU companies still believe more has to be done to improve financing the expensive building projects — as well as making them more affordable to low-income and moderate-income individuals. A typical prefab ADU ranges anywhere from $140,000 to $300,000. Custom ADUs are even more expensive. Converting a garage is cheaper, but in L.A., the process can easily approach six figures. None of which factors in the extra costs of permits, which ADU firm Modal estimates costs anywhere between $4,000 to $8,000 in Los Angeles.
There are few mainstream financing options for ADUs available, and renovation loans or cash-out refinancing often don’t cover the entire cost of the project. In a 2021 survey of homeowners by UC Berkeley, nearly 62% said they relied on cash savings or money from a friend or relative to pay for their ADU.
ADU advocates often tout it as an “affordable housing” solution — assuming that property owners will rent them out as an extra source of income. But with the median price of a single-family dwelling in L.A. County almost nearing $1 million, building an ADU is likely an opportunity reserved for more high-income individuals.
“Financing is really the only thing I think of that the city of L.A. and everywhere else really needs to work on. I think L.A. has been doing great with ADU use, and hopefully it will get better,” said Ross Maguire, CEO of Azure Printed Homes.
Samuel Schnieder, the CEO of Otto, said that ADU financing is a major barrier to expansion. Adding that, “It’s often a Catch-22 that the people who are the best equipped or the most enthusiastic about getting an ADU are the ones who can’t necessarily afford it.”
The California Housing Finance Agency this year began offering up to $40,000 in grants for such individuals, but it only covers new ADU “pre-construction” costs, which include everything from impact fees to permits to site prep. In Los Angeles, homeowners with an income below $180,000 qualify for such grants.
A total of 840 people in California have received grants since September — with all but a fraction receiving the full amount, a CHFA spokesperson confirmed to dot.LA.
First launched in 2019, Azure Printed Homes, based out of Culver City, relies on robotic printers to speed up the construction process. The company said it can 3D-print the walls of a 120-square foot unit in less than a day.
Maguire told dot.LA that Azure — which opened up reservations earlier this year — has received pre-orders for 167 units from 119 customers, totaling over $19 million in pre-orders.
But it’s unlikely you’ll see most of these units advertised as new rentals on Craigslist. Maguire says that most of Azure’s customer base desire an ADU to have more space for themselves or to house relatives, rather than to rent out as an additional source of income.
As such, some homeowners opt for factory-built ADUs instead of a more customized option, opting to shorten the timeline for inspections.
“Because our units are pre-approved with the State of California, there’s not a building and safety check that needs to happen on a local level with the city or county of L.A.,” Maguire told dot.LA..
However, even pre-fab ADUs have to be inspected on-site by the local planning authority. “(...the L.A.) Planning Department needs to look at how those modules interact with a specific site themselves, a process that can't be pre-approved as they are site specific,” confirmed a spokesperson for Azure.
In an effort to make the ADU permitting process faster, last year, the city of Los Angeles launched a set of “Standard Plans” that were pre-approved by LADBS. But such plans aren’t cheap — and won’t exempt homeowners from inspections.
“It should be noted that regardless of what pre-approved plan you choose, pre-approved plans still must go through the normal site-specific checks in order for the project to receive a permit,” said Czarnecki.
And if homeowners have the misfortune of building a Standard Plan ADU on an oddly-shaped lot or somewhere with atypical characteristics, they may have to go back to square one. In other words, their ADU will no longer be considered “pre-approved” and will have to go through the longer permitting process.
“Although the Standard Plans are a good jumping off point for creating a product that anyone can use -- at the end of the day, they’re mostly more expensive plans from what I’ve seen,” said Otto’s Schneider.
Casita Coalition and groups like California YIMBY are calling for better financing options for ADUs, particularly those that benefit individual cash-poor homeowners. At present, new ADUs are predominantly built in wealthier, whiter areas. In order for ADUs to actually help bridge the racial-wealth gap, policy experts say they have to actually be a viable option for the less affluent.
“I would be very pleased if more financing options [..for ADUs] developed from credit unions and community financial institutions to provide ADU-tailored loans to help lower income and moderate income home owners build ADUs,” Goyer told dot.LA.
Until then, the dream of Angelenos generating income from their backyards may remain just that.
From Your Site Articles
- LA's ADU Culture Still Faces Financial Barriers - dot.LA ›
- United Dwelling Raises $10M to Address the Housing Shortage ... ›
- These Granny Flat Designs Are Pre-Approved in LA - dot.LA ›
- Meet the Culver City Startup Looking to 3D-Print ADUs in Under 24 ... ›
- Can New Tech and ADUs Solve LA’s Housing Crisis? - dot.LA ›
- What Will Take To Make Modular Homes Mainstream? - dot.LA ›
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Amrita Khalid
Amrita Khalid is a tech journalist based in Los Angeles, and has written for Quartz, The Daily Dot, Engadget, Inc. Magazine and number of other publications. She got her start in Washington, D.C., covering Congress for CQ-Roll Call. You can send tips or pitches to amrita@dot.la or reach out to her on Twitter at @askhalid.
https://twitter.com/askhalid
From Retro Cool to AI Convenience: LA’s New Tech Normal
09:58 AM | July 25, 2025
🔦 Spotlight
Hello LA,
What do you get when you cross a 1950s diner, robot-powered retail, and apps trying to do the right thing? A very Hollywood week in LA tech.
Image Source: Tesla
Let’s start with the most literal: Tesla’s long-awaited retro-futuristic diner just opened on Sunset, complete with drive-in movie screens, EV charging bays, and a neon glow that practically begs to be Instagrammed. It’s a mashup of Elon-style nostalgia and innovation, where your burger might take longer to arrive than your Model 3 finishes charging. While the menu sticks to diner classics (yes, there's a milkshake bar), the real flex is how Tesla is rebranding waiting as an “experience.” In a city where parking is currency, Tesla has turned it into a destination.
Image Source: VenHub
Just down the street, VenHub’s smart convenience store quietly opened its doors, but this is no 7-Eleven. The Pasadena-based startup is betting on AI-powered, cashier-free retail hubs that can be dropped anywhere, anytime. Think vending machine meets Apple Store. Investors are buying in on the promise of 24/7 access to snacks, essentials, and even meds. No human required. In a city of hustle, VenHub wants to make “convenient” even more convenient. Check out their locations here.
Uber also rolled out new "Women Rider Preferences" in LA, letting women and nonbinary drivers opt to pick up women riders. It's a long-requested feature aimed at improving safety and comfort, especially for those driving at night. And while it’s opt-in for now, it’s a significant move toward rethinking trust and transparency in ride-hailing, starting with the people behind the wheel.
Image Source: Snap
And finally, Snap launched "Home Safe Alerts" to quietly keep you safer on the move. You can now send automatic updates to trusted friends when you're heading out or getting home. It’s a subtle yet powerful shift toward making tech feel more protective and less performative. Snap’s way of saying, "Text me when you get home," but without the follow-up guilt.
So whether you're grabbing a burger under the glow of a Tesla screen, scanning a QR code at a robot-run bodega, or just getting home a little safer, this week reminded us that LA doesn’t just build the future. It makes it weird, wonderful, and just a little more user-friendly.
Catch you next week ✌️
🤝 Venture Deals
LA Companies
- Nevoya has raised $9.3M in seed funding, led by Lowercarbon Capital, to transform the American trucking industry with its advanced freight platform. The company aims to modernize logistics by optimizing routes, improving efficiency, and better connecting shippers and carriers. The funding will help Nevoya expand its technology and scale operations to redefine how goods move across the country. - learn more
LA Venture Funds
- Pinegrove Capital Partners joined Armada’s $131M Series B round to support the San Francisco-based edge computing startup in its mission to bring secure, modular data centers to remote and infrastructure-poor environments. Armada builds rugged, containerized units like its flagship Galleon and newly unveiled Leviathan, designed to enable real-time AI and compute at the edge. The funding will accelerate the deployment of these solutions globally and scale development for critical defense, energy, and industrial use cases. - learn more
- Rebel Fund joined Lyra’s $6M seed round, supporting the San Francisco startup that’s redefining video conferencing with its AI-native platform. Lyra transforms traditional meetings into interactive workspaces with real-time collaboration and auto-generated summary notes. The capital will bolster infrastructure and support rapid growth as the company scales its go-to-market operations. - learn more
- Plassa Capital participated in Bloom’s $1.6M pre-seed round to support the startup’s mission of building an all-in-one hub for the crypto trading community. Based in Miami, Bloom offers a social platform that combines trading tools, real-time news, and community-driven insights for crypto traders. The funding will help the company grow its team, enhance its product, and expand its user base. - learn more
- Embark Ventures participated in TRIC Robotics’ seed funding round to support its development of autonomous robots that help farmers manage pests and plant diseases without chemicals. Based in Delaware, TRIC uses ultraviolet light and computer vision to treat crops like strawberries in a sustainable, labor-efficient way. The funding will help the company expand deployments, grow its team, and scale its technology to more farms across the U.S. - learn more
- Alexandria Venture Investments participated in Dispatch Bio’s $11.2M seed funding round. Based in San Diego, Dispatch Bio is developing a novel immunotherapy platform that aims to deliver a universal treatment for solid tumors by reprogramming immune cells at the tumor site. The funds will support further development of its platform and expansion of preclinical studies. - learn more
- Mucker Capital led Vaudit’s $7.3M seed round, reinforcing its belief in the San Francisco Bay Area-based startup. Vaudit delivers an AI-powered media audit platform that automates real-time validation of ad spend, detecting discrepancies before payments are processed. The funding will enable Vaudit to enhance its platform, expand its team, and scale its global reach across web and mobile channels. - learn more
- Morpheus Ventures participated in xLight’s $40M Series B funding round to support its mission of transforming semiconductor manufacturing. The Palo Alto-based company develops advanced laser-based lithography technology designed to make chip production faster, more precise, and more cost-effective. The new funding will be used to accelerate product development, expand the team, and scale operations to meet growing demand. - learn more
- Magnify Ventures participated in Alix’s $20M Series A funding round to help the company modernize the estate settlement process. Based in New York, Alix offers a digital platform that simplifies and streamlines estate administration for families and professionals. The funds will be used to enhance the platform, grow the team, and expand its reach to meet increasing demand. - learn more
- Untapped Ventures participated in Nexxa AI’s $4.4M seed round to support the company’s mission of bringing specialized AI solutions to heavy industries like manufacturing, logistics, and energy. Based in Sunnyvale, Nexxa’s platform enables domain-specific AI deployment tailored to industrial operations. The funding will help the company expand its engineering team, accelerate product development, and onboard new enterprise customers. - learn more
LA Exits
- Exverus Media, a Los Angeles-based media agency known for its data-driven approach to brand growth, has been acquired by global marketing firm Brainlabs. The acquisition strengthens Brainlabs’ U.S. presence and adds strategic media planning and measurement capabilities to its portfolio. Exverus will continue operating under its brand while gaining access to Brainlabs’ global resources and infrastructure. - learn more
- Generous Brands is set to acquire Health-Ade Kombucha, the Los Angeles-based beverage company known for its premium, gut-healthy drinks. The deal marks Generous Brands’ push into the fast-growing functional beverage market and adds a high-profile name to its portfolio. Health-Ade will continue operating with its existing team while benefiting from expanded resources and distribution capabilities. - learn more
- Launch Potato has acquired OnlyInYourState, a travel discovery platform known for spotlighting hidden gems across the U.S. The acquisition expands Launch Potato’s portfolio of digital brands and supports its goal of using AI to personalize trip planning experiences. OnlyInYourState will continue to operate while integrating with Launch Potato’s performance marketing and content strategy capabilities. -learn more
- Vilore Foods has acquired Tia Lupita Foods, a better-for-you Mexican food brand known for its hot sauces, chips, and tortillas made with simple, sustainable ingredients. The acquisition expands Vilore’s portfolio into the health-conscious and culturally authentic food space. Tia Lupita will continue to operate under its brand while gaining access to Vilore’s distribution network and resources. - learn more
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Locket, Disney, Instagram and the Battle for Your Attention
07:00 AM | August 08, 2025
🔦 Spotlight
Happy Friday, Los Angeles!
This week, LA’s biggest tech and media players made one thing clear: they want to own the relationship. Whether it’s a celebrity sending selfies straight to your home screen or a content giant rewriting the rules of sports broadcasting, the power shift toward more curated, direct experiences is unmistakable, and it’s being engineered right here.
Image Source : Locket
📸 Locket Doubles Down on Star Power
Venice-based Locket, the viral photo sharing app that made homescreen widgets cool, is now leaning into what LA does best: celebrity. Its new feature, Celebrity Lockets, allows artists to send exclusive photos directly to fans’ home screens. Early adopters include Suki Waterhouse and JVKE, with creators curating limited fan access to maintain intimacy and exclusivity. As Locket evolves from a casual social tool into a direct fan engagement platform, it’s becoming an increasingly relevant player in LA’s creator tech ecosystem.
🏈 Disney’s ESPN Plays Offense
Disney made a trio of bold moves this week that solidify ESPN’s future and its dominance in sports media. It’s buying out the NFL’s stake in ESPN, securing exclusive NFL Draft and behind the scenes content through 2033, and finally giving its standalone ESPN streaming service a launch date: August 21, 2025. That’s a power play straight out of Burbank. At the same time, Disney announced it will no longer report individual subscriber numbers for Disney Plus and Hulu, signaling a shift in how it wants investors and maybe consumers to measure success.
🗞️ The New York Post Bets on LA
In a sign of LA’s growing national influence not just in entertainment, but in news, the New York Post is launching a West Coast vertical called The California Post. With an editorial mission to cover the state’s cultural and political pulse, this move reflects a broader trend of major media brands planting roots in LA to chase both readers and relevance. For local media startups, content creators, and civic tech players, it’s yet another sign that the competition and the opportunity is growing.
Image Source: Meta
📱 Instagram Wants Your Inner Circle
Instagram rolled out a new set of features this week that prioritize connection with close friends. Users can now share what they’re doing, watching, or feeling with a smaller group, clearly borrowing from the intimacy playbooks of apps like BeReal, Snapchat, and yes, Locket. As social platforms shift from mass broadcast to curated circles, LA-based creators and consumer startups should take note: the next frontier might not be going viral, it might be going personal.
From star-powered lockets to streaming shakeups and platform reinventions, this week’s stories highlight how LA’s tech and media companies are rewriting the rules on connection and control.
Now onto this week’s venture deals 👇
🤝 Venture Deals
LA Venture Funds
- Starburst co-invested in Madrid-based SpaceTech startup Orbital Paradigm’s €470,000 raise, part of an ongoing €2M funding round led by Akka. The company is developing reusable orbital re-entry capsules aimed at reducing costs and increasing sustainability for space missions. Starburst’s participation underscores its focus on backing innovative aerospace technologies with commercial and defense applications. - learn more
- Rebel Fund participated in Orbital Operations’ $8.8M seed round, which came shortly after the company graduated from Y Combinator. The funding will support development of the company’s high-thrust orbital transfer vehicle, designed to maneuver satellites and other payloads in space more efficiently. - learn more
- Fourth Revolution Capital participated in SuperGaming’s $15M Series B round, which valued the company at $100M, five times its previous valuation. The funds will help expand titles like Indus Battle Royale internationally and scale SuperGaming’s tools for developers in emerging markets. - learn more
- Cedars-Sinai Health Ventures participated in Elion’s $9.3M seed round, joining NEA and others in backing the AI-powered healthcare research and intelligence platform. Elion helps over 60% of U.S. health systems evaluate emerging technologies through its structured vendor marketplace. The funds will support platform development, new product launches, market expansion, and team growth. - learn more
- M13 led the $10M seed round for Kontext, an AI-powered contextual advertising startup emerging from stealth mode. Kontext’s platform enables real-time ads inside chatbot responses using large language models, and the funding will help expand its engineering team and develop image-based ad formats. - learn more
- STORY3 Capital Partners made a significant minority investment in U.K.-based activewear brand Adanola, valuing the company at approximately $530 million. This strategic partnership brings STORY3’s deep experience in consumer brand scaling to support Adanola’s global expansion, particularly across the U.K. and U.S. markets. - learn more
- Walkabout Ventures participated in OLarry’s $10M Series A round, which was led by TTV Capital and included Marin Sonoma Impact Ventures. The funding brings OLarry’s total capital raised to $14.5M and will be used to scale its AI-powered tax advisory platform for high-net-worth individuals and to acquire regional CPA firms as part of its growth strategy. - learn more
- Glendon Capital Management participated in Grasshopper’s $46.6M funding round, which was led by Patriot Financial Partners, to support the bank’s merger with Auto Club Trust in April 2025. Their investment reflects confidence in Grasshopper’s ability to scale its digital banking platform and expand its suite of business and consumer financial products. Growth metrics as of June 30, 2025 showed a 53% increase in assets, an 81% surge in deposits, and a 49% rise in loans, all backed by this strategic capital infusion. - learn more
- Mucker Capital participated in beatBread’s $124M capital raise, alongside Citi’s SPRINT team, Deciens Capital, and Advantage Capital. Their involvement supports beatBread’s strategy to expand sales, marketing, and technology operations, while enabling greater funding flexibility for independent artists, songwriters, and labels through its AI-powered platform. - learn more
- B Capital co-led Positive Development’s $51.5M Series C funding round alongside aMoon and Flare Capital Partners, helping to fuel expansion of its developmental therapy model for autistic children. Their involvement underscores confidence in the company’s family-centered, play-based approach—which lowers costs by about 50% compared to traditional ABA therapy—and supports growth through new Medicaid partnerships and technology enhancements. - learn more
- Clocktower Ventures participated in Creditop’s latest $3.7M funding round, which was led by Collide Capital and also included Alaya Capital, Amador Holdings, Newtopia, and Driven VC. Their involvement supports Creditop’s mission to enable credit access at the point of sale, without a credit card, and will help fintech deepen its footprint in Colombia while exploring expansion across Central America and Peru. - learn more
- Thiel Capital participated in Pilgrim’s $4.3 million seed funding round, backing the biotech startup founded by 21-year-old Jake Adler after he demonstrated its hemostatic dressing, Kingsfoil, on himself. Their support underscores confidence in Pilgrim’s aggressive R&D and dual-use medical platform targeting both military and civilian emergency care. - learn more
LA Exits
- ElectroMagnetic Systems, Inc., a California-based specialist in AI and machine learning-powered target recognition software for space-based radar, has been acquired by Voyager. The deal strengthens Voyager’s AI-native surveillance and intelligence capabilities, enabling real-time monitoring across ground, air, and space domains to meet evolving defense and commercial demands. - learn more
- Daring Foods is being acquired by Australia’s leading plant-based meat company, v2food, in a move that strengthens v2food’s push into the U.S. market. Daring will continue operating under its own brand and will serve as a platform to introduce v2food’s own products across the States. The deal, paired with a strategic partnership with Japanese food giant Ajinomoto, aims to accelerate innovation in clean-label protein and expand global reach. - learn more
- Irwin Naturals is being acquired by FitLife Brands in an all-cash transaction valued at $42.5M, which includes approximately $16M in net working capital. The deal, expected to close around August 8, 2025, will nearly double FitLife’s scale, with projected combined annual revenue of over $120M and adjusted EBITDA between $20–25M. It will be funded with cash on hand, a new term loan, and a revolving credit facility, and is expected to generate synergies through complementary product lines, broader mass-market distribution, and improved operational efficiencies. - learn more
- Solsniper, a Solana-focused trading and analytics platform known for high-speed memecoin execution, has been acquired by Phantom as part of its strategy to expand beyond wallets into full-service on-chain finance. The Solsniper team will join Phantom to enhance its advanced trading features, while the platform will continue operating independently. The move underscores Phantom’s ambition to offer seamless, integrated trading tools within the Solana ecosystem. - learn more
- Cinelease is being acquired by Zello, a private investment platform dedicated to scaling businesses across the entertainment industry, in a strategic move to bolster production infrastructure and amplify its presence across North America. Under Zello’s ownership, Cinelease will continue operating as a standalone company led by its veteran team, enhancing its lighting, grip, and studio offerings for film, TV, and commercial productions. This acquisition sets the stage for disciplined growth and stronger relationships within the film and television production ecosystem. - learn more
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